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What is the total effect of the errors on the balance

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Reference no: EM132980920

Question - Bam Company is a calendar year corporation. Its financial statements for the years 20x5 and 20x6 contained errors as follows:

20x5 20x6

Ending inventory P6,000 understated P10,000 overstated

Depreciation e 11,000 overstated 7,000 overstated

Accrued expenses 4,500 understated 7,500 understated

Prepaid expenses 5,000 understated 12,000 understated

Accrued revenues - 3,000 understated

Deferred revenues 1,200 understated -

Required - Based on the above data, answer the following (ignore effect of taxes):

-What is the total effect of the errors on the 20x5 net income - under?

-What is the total effect of the errors on the company's working capital at December 31, 20x5-over?

-What is the total effect of errors on the 20x6 net income-over?

-What is the total effect of the errors on the balance of the company's working capital at December 31, 20x6-over?

-What is the total effect of the errors on the balance of the company's retained earnings at December 31, 20x6-under?

Reference no: EM132980920

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